Cheyenne Regional Medical Center Series 2021 Bonds
Pricing Date: January 14, 2021
$71,615,000 Series 2021 Bonds
Serial Bond Maturities: 2022-2038
Term Bond Maturities: 2042
Objectives
Cheyenne Regional Medical Center (“CRMC”) sought to take advantage of the current low-rate environment to refund existing debt to generate cash flow and present value savings. The goal was to achieve the lowest Yield to Maturity possible.
Challenges
- Navigating a financing given financial and operating strains brought about by the COVID-19 pandemic
- Issuing tax-exempt bonds at a time where the industry trended towards issuing more taxable debt
- Effectively timing the market for a successful bond pricing
Solution
- Crafted a strategic Rating Agency approach: Management detailed its initial and ongoing response to the financial impact of COVID-19 to operations. Ultimately, S&P affirmed CRMC’s ‘A’ rating with a positive outlook.
- Advocated for 3.00% coupon for the 2042 term bond: The pricing benefit of the lower coupon effectively lowered the overall True Interest Cost by 20 basis points or a Present Value savings of over $1.5mm.
- Targeted pricing in January: CRMC had the option of pricing in December but opted for January based on historical positive results in the month. Ultimately, CRMC received nearly $1.3bn in orders from 66 unique investors and was 17.7x subscribed. As a result, yields were lowered 12-25bps from original pricing levels.
About Cheyenne Regional Medical Center: A (S&P)
About Cheyenne Regional Medical Center: ‘A’ Positive Outlook (S&P)
CRMC is an acute care hospital located in Cheyenne, Wyoming. CRMC is a component unit of Laramie County, Wyoming. CRMC is licensed for 206 beds including 120 medical and surgical, 15 intensive care, 16 pediatric medical and surgical, 19 obstetric, 20 physical rehabilitation, and 16 psychiatric care. CRMC provides comprehensive healthcare services to patients who are generally residents of the greater Laramie County, Wyoming area.
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